Disclaimer In this presentation we make forward-looking statements that are subject to risks and uncertainties. Such statements are based on beliefs and assumptions of our management and information to which the Company currently has access. Forward-looking statements include information regarding our intent, belief or current expectations, as well as those of the Board of Directors and Officers of the Company. The statements and information care about the future also include information of possible or presumed operating results, as well as statements preceded by, followed by or include the words "believes", "may", "will", "continue" "expects", "anticipates", "intends", "plans", "estimates" or similar expressions. The statements and information about the future are not guarantees of performance. They involve risks, uncertainties and assumptions because they are relate to future events and therefore depend on circumstances that may or may not occur. Future results and the creation of value for shareholders may differ from those expressed or suggested by forward looking statements. Many of the factors that will determine these results and values are beyond of our capacity or ability to control or predict. 2
Agenda 1. 2. 3. 4. 5. Corporate Profile Strategy Real Estate Market Operational Performance Financial Performance 3
1 Corporate Profile
With over 60 years of history, Gafisa is a benchmark in real estate development and construction in Brazil Time Line 1954 2006 2007 2008/09 2013 2017 2018 Foundation IPO Listing NYSE Acquisition of 60% of Alphaville Acquisition of Tenda Sale of 70% of Alphaville Spin-off Tenda Structural (operational, administrative e financial) and strategic positioning to thrive in the new real estate cycle 5
Gafisa focus its activities in the middle and upper-middle class segments, in the states of São Paulo and Rio de Janeiro Corporate Profile Segments Moov units priced between R$350k-R$500k Line units priced between R$500k-R$2MM Regions São Paulo Rio de Janeiro Approx. 2,700 employees (including own and third parties) 30% interest in Alphaville 6
Management Team Lean corporate structure, lead by a management team with an average of 12 years of Gafisa experience CEO Sandro Gamba People Adriana Farhat Development Guilherme Carlini Sales & Marketing Lucas Tarabori 7 CFO & IRO Carlos Calheiros Operational Luciano Amaral Administrative Gerson Cohen Current management team average tenure is of 12 years 7
2 Strategy
Gafisa s strategy for the next cycle is based on 4 pillars of competitive advantages Corporate Governance Constructive Method Gafisa Strategy Sales Model Brand Strength 9
Advanced Corporate Governance practices, particularly when compared to the real estate sector Company listed in the Novo Mercado, B3 s segment with the strictest corporate governance requirements 100% voting shares, 100% free float and 100% tag along rights Majority of independent members in the Board of Directors (6 out of 7) Advanced structure of Board committees General Meeting Board of Directors Fiscal Council Audit Committee Remuneration Committee Naming and Corporate Governance Committee Executive Finance Committee Executive Investments Committee Executive Ethics Committee 10
Gafisa uses an innovative process in its Moov line, which reduces the cycles in its construction method Industrialization Reduction of the activities cycle 70% of cycles with up to 5 suppliers Productivity gains Eased planning and control Benefits Cost Reduction Term Reduction 11
Aligned with its tradition of innovation, Gafisa is seeking to increase the share of technology in its sales mix Structure is ready to efficiently cover all sales channel Constant digital innovation, with increasing use of analytics tools, AI and social media engagement. Digital platform is already responsible for ~40% of Gafisa Vendas sales Best sales campaign with the Olho no Olho Real Life case (series of live shows streamed by Facebook) Best use of technological resources Case Casa de Vidro Olho no Olho Increase in the use of digital channels reflects directly in selling expenses Selling Expenses/Net Sales (%) and SoS 12M 29.6% 13.1% 26.1% 13.6% 37.6% 10.6% 9M15 9M16 9M17 12
The strength of the Gafisa brand, built in over 60 years of excellency, is one of the Company s strong pillars More than 1,100 projects delivered More than 16 million square meters built More than 1.5 million people live in a Gafisa Track Record of deliveries on time and within budget 2017 Development Category: 1 st Place Construction Category: 2 nd Place Marca Mais Category: 3 rd Place Sales Company Category: 5 th Place 13
3 Real Estate Market
PSV of residential launches was up by 12% in São Paulo metro region in the 9M17 x 9M16 comparison PSV Residential Launches (R$ billion) - RMSP 28.2 26.5 16.5 13.1 7% 52% 3.1 3.1 3.0 3.0 1.3 1.9 2013 2014 2015 2016 1Q16 1Q17 2Q16 2Q17 3Q16 3Q17 Source: Secovi 15
The PSV of residential sales in São Paulo metro region also recovered and was up by 10% y-o-y (9M17 x 9M16) PSV Residential Sales (R$ billion) - RMSP 26.2 18.7 14.1 11.5 2.3-13% 2.0 3.1 10% 3.4 30% 2.4 3.2 2013 2014 2015 2016 1Q16 1Q17 2Q16 2Q17 3Q16 3Q17 Source: Secovi 16
Residential inventory presented a downward trend, with a reduction of launches in the last years and sales recovery (RMSP) Inventory (Units) - RMSP 50.000 mai/15 45,331 40.000 30.000 dez/16 35,857-20% set/17 28,844 20.000 jul/10 20,047 10.000 0 jan/10 mai/10 set/10 jan/11 mai/11 set/11 jan/12 mai/12 set/12 jan/13 mai/13 set/13 jan/14 mai/14 set/14 jan/15 mai/15 set/15 jan/16 mai/16 set/16 jan/17 mai/17 set/17 Source: Secovi 17
4 Operational Performance
Rigorous analysis for launch approval reflects in the SoS of 47.7% of year launches, with PSV sold of R$250.8 million* Launches J330 Jardins Parque Ecoville F3 Moov Parque Maia Moov Espaço Cerâmica Moov Estação Brás Location Launch (R$ million) Jardins São Paulo/SP Curitiba/PR Guarulhos/SP São Caetano/SP Brás São Paulo/SP Jul-17 Jul-17 Aug-17 Sep-17 Dec-17 PSV 74 57 171 169 87 Project *Sales in units until 3Q17 19
Focus in sales of inventory in 1H17, with most of the launches in the 3Q17. PSV at the same levels as in 2013. Net Sales (R$MM) and PSV Net Sales Breakdown 9M17 34.5% 36.8% 37.6% 31.5% 27.9 27.7% 29.6% 31.1% 28.9% 26.5% 26.1% 37.6% 8.0% 10.5% 11.0% 10.8% 3.3% 6.3% 11.5% 16.8% 356 6.7% 7.9% 18.3% 354 R$598 MM 62.4% 242 248 245 258 180 67 130 117 127 Inventory Launches 1T15 1Q15 2T15 2Q15 3T15 3Q15 4T15 4Q15 1T16 1Q16 2T16 2Q16 3T16 3Q16 4T16 4Q16 1Q17 1T17 2Q17 2T17 3Q17 3T17 Net Sales Quarterly PSV PSV 12M 20
Dissolutions at the lowest levels since 2014, with concentration on older projects Dissolutions (R$MM) Dissolutions Breakdown 9M17 170 147 20.0% 125 116 125 132 106 100 118 114 R$316 MM 84 80.0% 1Q15 1T15 2Q15 2T15 3T15 3Q154Q15 4T15 1T16 1Q16 2Q16 2T16 3Q16 3T16 4Q16 4T16 1T17 1Q17 2T17 2Q17 3Q17 3T17 Residential Commercial 21
Reduction in the level of inventories during the year reflects the successful launches and the company s efforts in the sale of remaining units Evolution of Inventories in 2017 (R$ Thousand) 464 316 959 1.760 1.581 Inventories Estoque 4T16 4Q16 Lançamentos Launches Cancellations Distratos Vendas Gross Sales Brutas Inventories Estoques 3T17 3Q17 22
Despite the high level, the residential inventory is performing well. Commercial still presents low SoS. Inventory Breakdown (R$ thousand) Region and Category 1,103 Total Inventory - R$1.581 MM 134 170 97 77 - São Paulo Rio de Janeiro Outros Other Mercados Residencial Residential Comercial* Commercial* *97% of commercial inventory is comprised of concluded projects Inventory by work status (PSV) Concluded Inventory by Category (PSV) Comercial Invetory by Geography (PSV) 32% 42% R$1,581 MM R$507 MM R$304 MM 58% 56% 68% 44% Concluído Finished Em Notobras/Não Finished iniciado Residencial Residential Comercial Commercial* São Paulo Rio de Janeiro *Inventory concentrated in 1 project (SAO) ** Inventory concentrated on two projects (Americas and Target) 23
Landbank suitable for 2-3 years of launches Landbank (R$ thousand)* - Region 2,518 Distribution São Paulo 48.3% 1,775 51.7% Rio de Janeiro % Permuta Swaps % Sem No Swaps Permuta São Paulo Rio de Janeiro 27.0% Average ticket: R$530,000 Average PSV of landbank: R$186.7MM 73.0% Launches in 2018 at the same levels of 2016 *More information available on landbank in Appendix I 24
This year, Gafisa delivered 8 projects and currently has 19 construction sites with 370 thousand m² under supervision Deliveries 2017 Project Delivery Launch Year Location Gafisa Units PSV (R$MM) EASY TATUAPE march-17 2013 São Paulo - SP 145 61 HI GUACA march-17 2014 São Paulo - SP 183 64 HOME ESPAÇO CERÂMICA march-17 2014 São Caetano do Sul - SP 256 140 EASY CIDADE UNIVERSITÁRIA april-17 2014 São Paulo - SP 334 152 SQUARE OSASCO F1L1 may-17 2013 Osasco - SP 302 86 RISTRETTO LORIAN BOULEVARD june-17 2014 São Paulo - SP 271 179 TODAY MODERN RESIDENCES june-17 2014 Rio de Janeiro - RJ 113 63 GO MARAVILLE august-17 2015 Jundiaí - SP 286 75 TOTAL 9M17 1,890 820 25
5 Financial Performance
The financial result is still impaired by older projects, but the adjusted gross margin already shows improvement Revenue Recognition x Net Sales (by project launch year) 3Q17 Net Sales 8% 10% Net Revenue 15% 12% 11% 8% 63% 27% 46% 2017 2016 2015 2014 2013 2016 2015 2014 2013 Profit and Gross Margin (R$ Thousand) 3Q17 2Q17 Q/Q (%) 3Q16 Y/Y (%) 9M17 9M16 Y/Y(%) Net Revenue 160,325 147,253 9% 268,271 40% 444,117 651,881-32% Gross Profit -7,631-14,403-47% 963-892% -39,201 30,503-229% Gross Margin -4.8% -9.8% 500 bps 0.4% -520 bps -8.8% 4,7% -1350 bps (-) Financial Costs 26,317 26,824-2% 46,258-43% 91,117 118,019-23% Adjusted Gross Profit (1) 18,686 12,421 50% 47,221-60% 51,916 148,522-65% Adjusted Gross Margin (1) 11.7% 8.4% 330 bps 17.6% -590 bps 11.7% 22.8% -1110 bps 1) Adjusted by capitalized interest. 27
Backlog Results showed growth in 3Q17, attesting the margin recovery in more recent projects R$ thousand 3Q17 2Q17 Q/Q (%) 3Q16 Y/Y (%) Backlog Revenues 630,168 450,923 40% 394,475 60% Backlog Cost of Units Sold -409,994-289,632 42% -251,151 63% Backlog Results 220,174 161,291 37% 143,324 54% Backlog Margin 34.90% 35.80% -90 bps 36.3% -140 bps 28
G&A reduction, with an ongoing search for efficiency gains, is reflected in the Company s results SG&A Evolution (R$ MM) 80 8% 74 7% 69 9M15 9M16 9M17 29
Reduction carried out in mainly all SG&A lines 3Q16 3Q17 Chg (%) 9M16 9M17 Chg (%) Salaries and Charges 9,583 7,081-26% 26.473 25.877-2% Benefits to Employees 1,025 704-31% 3.196 2.480-22% Travel and Utilities 107 67-37% 463 245-47% Rent and Condominium Fees 1,759 1,584-10% 6.158 4.399-29% IT 3,832 1,656-57% 11.668 9.621-18% Stock Options 2,317 1,195-48% 5.506 2.898-47% Provision for Profit Sharing 6,250 1,037-83% 12.500 9.395-25% Other 93 204 119% 434 584 35% Third Party Services* 2,579 7,913 207% 7.672 13.049 70% TOTAL 27,545 21,441-22% 74.070 68.548-7% *Expense related to Tenda s Spin Off 30
Tenda s capital reduction and payment of the FGTS debentures in 4Q17 Gross Debt Evolution (R$ MM) 1,907 1,692 1,589 1,327 1,219 2015 2016 1T17 2T17 3T17 During 4Q17, we paid the FGTS debentures in the amount of R$158 million using the funds received from the payment related to Tenda s capital reduction Cost of debt at the end of 3Q17 was 13.23% per year In 3Q17, leverage (Net Debt/Shareholder s Equity) was 87.1%. Disregarding Project Financing, it was 12.7% 31
Debt renegotiation coupled with capital increase are key to the Company s strategic positioning in the new cycle Debt Maturity Schedule 3Q17 (R$ MM) Reported Simulated 155 After renegotiation with banks linked to the capital increase and payment of debentures 155 438 403 206 17 302 168 351 243 Até Sep/18 Set/18 Até Sep/19 Set/19 Até Sep/20 Set/20 Até Sep/21 Set/21 Até Sep/18 Set/18 Até Sep/19 Set/19 Até Sep/20 Set/20 Até Sep/21 Set/21 Dívida Gross Bruta Debt Debêntures Debentures- FGTS Dívida Gross Bruta Debt Debêntures Debentures- FGTS 32
Appendix
Appendix 1. Landbank Regional Land Data Compra Área Total Unid. GFSA Part. % VGV Liq. GFSA (M)* SP Land 1 jun-08 28,303 928 100.0% 654.5 SP Land 2 jan-10 2,269 64 100.0% 41.1 SP Land 3 jul-10 19,443 988 100.0% 263.7 SP Land 4 sep-10 10,000 296 100.0% 80.1 SP Land 5 jan-11 11,078 671 50.0% 235.8 SP Land 6 may-11 5,469 178 100.0% 86.2 SP Land 7 jun-11 3,476 220 100.0% 46.1 SP Land 8 jul-11 7,951 632 100.0% 335.2 SP Land 9 nov-11 4,332 228 100.0% 88.3 SP Land 10 mar-13 2,568 543 100.0% 89.8 SP Land 11 may-13 10,623 396 100.0% 143.4 SP Land 12 jul-13 3,495 386 100.0% 81.4 SP Land 13 dec-13 2,520 76 100.0% 139.7 SP Land 14 jul-14 1,917 104 100.0% 153.7 SP Land 15 jul-15 1,182 91 100.0% 79.3 RJ Land 16 jan-08 17,584 84 100.0% 231.6 RJ Land 17 sep-11 85,677 1.037 100.0% 611.0 RJ Land 18 nov-12 60,000 300 100.0% 354.8 RJ Land 19 mar-15 2,623 260 100.0% 144.5 RJ Land 20 mar-15 6,879 267 100.0% 170.8 RJ Land 21 nov-15 7,909 0 100.0% 115.5 RJ Land 22 dec-15 1,589 55 50.0% 66.0 RJ Land 23 aug-16 6,457 244 100.0% 80.7 *Estimated Unitary Values 34